Dealer and Three Others Convicted of Check Kiting

December 1, 2004byRob Bates

Four New York diamond dealers pled guilty recently to various conspiracy and bank fraud charges stemming from check kiting.

Among them was Jacob Haas, whose default several years ago scandalized 47th Street. Haas pled guilty to one count of conspiracy to commit bank fraud, two counts of bank fraud, and one count of bribing bank officials. Haas faces a maximum term of five years’ imprisonment on the conspiracy charge, 30 years’ imprisonment on each of the two bank fraud charges, and five years’ imprisonment on the bribery charge.

David Klein, 47, owner of Dajoy Diamonds, pled guilty to one count of conspiracy to commit bank fraud and one count of bank fraud. He faces a maximum term of five years’ imprisonment on the conspiracy charge and 30 years’ imprisonment on the bank fraud charge.

Pinhas Ben-Ari, an owner of Yardi Diamonds, and Sammy Malsaton, owner of A.L.P.S., both pled guilty to one count of conspiracy to commit bank fraud. Malsaton also pled guilty to two counts of bank fraud.

At press time, another dealer charged in the original indictment, Isaac Dayan, 48, owner of Fortune Diamonds Importers, had not filed a plea and was scheduled to begin his trial in September.

The four are accused of misrepresenting millions of dollars in checks as legitimate sales, allowing them to withdraw funds and obtain lines of credit to which they were not entitled.